The Doughty Centre Report

3.“No brag, just facts”: adding reporting rigour by drawing on science

is in line with business thinking advocated as part of “the Big Pivot” (Winston, 2014): changing corporate mind-sets to prioritise environmental, economic and social challenges and opportunities and treating them as central to business success or failure, rather than as philanthropy or niche issues. Although the focus on firms adopting externally developed science-based targets is relatively new, commentators have been keen to stress the benefits of such a move. Setting (usually ambitious) science-based targets can spur innovation on a far greater scale than traditional company-developed incremental goals. In addition, early adopters will be well placed for future industry or government regulation and gain reputational benefits. With the move to science-based targets being such a recent trend, such claims are still largely anecdotal. To begin to address the paucity of research in this developing area, we examined the sustainability reports of the top 75 firms listed in the Fortune Global 500 list to see how they are incorporating science into their sustainability reports and what, if any, effect this had on their perceived reputation and competitive positioning. Sources of science based sustainability targets: • Inter-governmental Panel on Climate Change (IPCC) Fifth Assessment Report 2014 – synthesis of climate change data and predictions to assist policy makers with aim of keeping global warming within two degrees. • United Nations (UN) Global Compact – Charter setting out 10 principles of environmental and social responsible business for corporations to follow • UN Environmental Program Emissions Gap Report 2015 – sets out 17 sustainability goals to be met by 2030 • ‘Action 2020’ from the World Business Council for Sustainable Development (WBCSD) - provides corporations with a framework for action to deliver against the environment goals outlined in the WBCSD ‘Vision 2050’ report

The call for managers to base business decisions on the best available evidence, rather than gut feel alone, has grown considerably in recent years. This represents a marked shift in approach, requiring managers to demand evidence for, and examine the logic of their arguments, and to make decisions that incorporate robustly gathered facts and data. “No brag, just facts” – a motto credited to CEO of DaVita, a large US operator of kidney dialysis centres that has developed a set of measurable monthly metrics on the quality of its care which drive decision making in the company An evidence-based approach is gaining traction in sustainability reporting through the adoption of externally developed, science-based targets. For firms this means setting sustainability goals in line with wider scientific objectives that outline what is necessary to mitigate harmful effects on the Earth, which, in the majority of cases, focuses on alleviating the effects of climate change and other global challenges. For example, using external evidence to formulate goals is particularly applicable to carbon dioxide and greenhouse gas emissions targets. Sustainability-oriented innovation (Adams et al. 2015) is pushing firms to set targets that respect climate science and their own goals which often take an incremental approach and may be based on what companies feel is achievable and/or affordable. Aware that the vast majority of firms lack expertise in this area, the Science Based Targets Initiative was created in 2014 to develop a methodology, which helps companies, set scientific goals. By September 2016, 179 firms had signed up, pledging to find ways to reduce their emissions to meet science- based global warming targets. This shift, from looking to external measures, rather than creating internal ones,

• UN Sustainable Development goals set in 2015 - lists 17 goals to be met by 2030 to tackle global climate change, poverty and inequality

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Will Evidence-based management shape the future of Corporate Sustainability Reporting?